holding company of
Three people aware of the development told ET that Future Group is ready to pay a controlling premium to buy 34 per cent and 17% stake in the unlisted company. Generali holds 49 per cent and IITs 17 per cent in the JV.
“Preliminary talks have taken place. Bond is keen, but may not be willing to pay very high premiums. And although Futures may be open to cash out, it will also depend on what Generali has to say …,” said a person familiar with the matter.
Chandrashekhar Ghosh, founder of Bandhan and founder of Future Group Kishore Biyani declined to comment.
In accordance with the agreement between the shareholders of the Company, the opinion of Generali shall be in any such transaction.
The talks are revolving around who will have controlling power, said people in the know. Bandhan has made it clear that it will do the deal only if it gets a majority. Generali also has the option of increasing its stake in line with Indian law, which now allows a foreign partner to hold up to 74 per cent stake in local insurance ventures.
Generali did not comment on the matter.
“Bandhan is powerful in the financial services space with its wide distribution network, whereas Generali would not be able to distribute or scale without a strong local partner. But given the opportunity available in India’s low penetration insurance market, Generali will not give up easily. could be,” said. Another person who is closely monitoring the development.
The deal, if done, would be a win for Bandhan Group, which has cash for big-ticket investments and a distribution network to sell third-party products, and Kishore Biyani’s Future Group, which is keen to Known to monetise its stake since it has been facing liquidity crunch following pandemic-led disruptions.
Comments sought from Future Generali, Bandhan Group, Future Group and IIT did not elicit any response.
In August 2020, Bandhan Financial Holdings increased its stake in Bandhan Bank from 61% to 40% for an amount of Rs 10,600 crore. The holding company is expected to utilize part of the amount received for the proposed insurance sector.
Bandhan had last year expressed interest in acquiring a controlling stake in Reliance Nippon Life Insurance. Flickrt co-founder Sachin Bansal was reportedly in talks with future general Life promoters asked to buy Biyani’s stake in 2020 but talks did not go ahead.
Future Generali India Life had collected Rs 523 crore of first premium in FY21, while writing off a gross premium of Rs 1322 crore, down 11% from the previous financial year. In the end, he had a loss of Rs 158 crore.
Emkay Global Financial Services report said the Indian life insurance sector – two decades after liberalization – is at a turning point. The brokerage firm said, “It is set to enter a multi-decade growth rebound era, driven by economic growth and favorable demographic changes between the very high and rising mortality protection gap and the longevity (retirement) savings gap.” Is.”